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CAMPI: 2018 Car Sales Down By 16%

After years of breaking records year after year, the automotive industry seems to have finally lost its momentum.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) has released its annual report which show a decline in the annual sales of local car manufacturers.

According to the Philippine News Agency, CAMPI reported that sales for 2018 slumped by 16 percent—which is two points greater than the predicted decline last September.

According to CAMPI’s sales report, its members only sold 357,410 units last year. Compared to the 425,673 units sold in 2017, the automotive industry experienced a 68,253 drop in sales.

Drop in sales for both passenger and commercial vehicles

Both passenger and commercial cars were hit by the sales drop. In 2018, the former only sold 108,020 units, which is 21.8 percent lower than 2017 figures. Meanwhile commercial vehicles dropped by a little above 13 percent from last year’s 248,390 to 286,249 units sold in 2017.

How did the automotive industry fare over the past few years in comparison to the 2018 come down? Here are the numbers reported by CAMPI from 2012 to 2018:

Bracing for impact

Since last September, CAMPI has been bracing for the impact of a slower automotive industry due to first tranche of the Tax Reform Acceleration and Inclusion (TRAIN) Law.

Under the tax reform program spurred by the Duterte administration, additional taxes will be levied to all vehicles under based on the schedule indicated in the law. However, electric vehicles and pickup trucks were excluded from the additional taxes. Hybrid vehicles will only be slapped with half the excise tax for their rates.

In addition to the excise tax on vehicles, the buying frenzy before the TRAIN Law came into effect, particularly during November and December 2017, further widening the gap between sales last year and in 2017.

Meanwhile, former Mitsubishi Motors Philippines vice president Froilan Dytianquin wrote on Visor that the worsening inflation rate last year also shot down buyer’s confidence in the automotive industry. Couple that with the excise tax and not even lucrative offers from auto dealers or show-stopping models can amend the sales nosedive.

“So, why did vehicle demand lose steam? The increase in excise tax—especially on core mainstream segments—may have triggered the slowdown, but this could have been neutralized by a robust economy and a strong consumer outlook. Although the country’s GDP grew by 6.1% in the third quarter, consumer confidence index fell to negative 7.1 for the same period after being positive for the past 24 months,” Dytianquin said.

“Buyer confidence worsened due to the high inflation rate, which hit a nine-year high of 6.7% in September. All these factors increased the cost of living, resulted in soaring fuel prices and rising interest rates, and affected car loans,” he added.

Meanwhile, CAMPI president Rommel Gutierrez is hopeful that the economic cooldown will finally pave the way towards more units sold in 2019.

“The auto industry has been recovering since the second half of 2018. We are confident that the continued month-on-month positive sales growth rate during the period will be sustained in 2019,” Gutierrez said.

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Tale of the tape

Based on the figures published by Visor, Toyota emerged as the most successful vehicle brand in the Philippines, with a market share of 38.42 percent.

Although the Japanese manufacturer still has the lion’s share of the automotive market, it wasn’t also spared by the sales slump, showing a 16.57 percent decline on its sales compared to 2017 figures. Most manufacturers were also hit, even the big ones like Mitsubishi, Hyundai, Ford, and Honda.

However, not every manufacturer had a turbulent 2018. Nissan, which ranked fourth in terms of units sold, posted a 39.84 percent increase from 2017’s 24,995 units to 35,401 vehicles last year. Suzuki also reported positive sales, with a slight increase of 2.48 percent from 2017 to 2018. Luxury car dealer PGA Cars also won big last year by selling 7.57 percent more cars last year.

In a press release by Nissan Philippines, the company said that its popular pickup, the Navara, served as the main driver for the brand’s growth. The Navara alone constituted 46.2 percent of Nissan’s 2018 sales. Meanwhile, Suzuki said that its multi-purpose vehicle Ertiga accounted to one-third of the brand’s 2018 units sold.

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